Article Summary
Why do healthcare capital projects so often drift from their original plans? Drawing on reflections from George Findlay, Former Chief Executive of University Hospitals Sussex NHS Foundation Trust, this article explores why delay and cost escalation are rarely just delivery problems, but signs of deeper challenges around assumptions, governance and organisational continuity.
Capital projects are among the most visible investments a healthcare system can make. New hospitals, diagnostic centres and major refurbishments are intended to signal progress, expand capacity and improve outcomes. Yet across the UK and internationally, these projects have become equally associated with delay, cost escalation and compromised delivery.
From large infrastructure programmes to healthcare estate developments, overruns are so common they are often treated as inevitable. But inevitability is rarely a useful explanation. For healthcare leaders operating under sustained financial and operational pressure, the more important question is why this pattern persists and what it reveals about how capital projects are conceived, governed and delivered.
This is not simply a technical problem of construction or programme management, but a structural issue that sits at the intersection of strategy, leadership, risk and system complexity.
The problem with early certainty
Major capital projects rarely overrun because of a single decision or isolated failure. More often, they follow a recognisable pattern. The initial business case is built around assumptions that appear reasonable at the time. Timelines appear achievable, costs are framed within acceptable limits, and the project is presented with the confidence needed to secure support.
The difficulty is that these early figures can quickly become fixed in people’s minds. Boards require affordability assessments, systems need capital plans, government needs announcements, clinical teams need confidence that change is coming, and communities need reassurance that promises are real. In that context, early certainty can feel necessary, but it can also create the first conditions for later overrun.
At the beginning of a project, many critical issues may still be unresolved. The brief may not yet be fully tested. The site strategy, decant plan, workforce model, planning position, procurement route and enabling works may still be developing. Yet once a cost and completion date are established, the project is often judged against a baseline that may never have reflected the true level of risk.
This is particularly challenging in healthcare. Hospital projects must respond not only to construction realities, but to evolving clinical requirements, regulatory standards, workforce constraints and operational pressures. A hospital designed several years ago may no longer fully reflect current models of care by the time it is built. Services evolve, demand rises, digital expectations shift and infection prevention standards continue to develop. The result is often late-stage redesign, widening scope and increased cost pressure.
Just as importantly, the organisations commissioning these programmes may also evolve over time, creating a growing gap between the assumptions that informed the original business case and the realities that exist by the point of delivery.
The Public Accounts Committee has made a similar point in relation to government major projects, highlighting the risks of unclear objectives, immature design and budgets or schedules being announced too early.
This is not simply a technical problem, but a leadership challenge. Once a project has been publicly framed around a number or completion date, it becomes much harder to have an honest conversation when the evidence changes. A revised estimate can feel like failure, even when it is simply a more accurate view of reality. Contingency can be treated as inefficiency, rather than a sensible recognition of risk.
For healthcare capital projects, the risks are intensified by the environment in which they are delivered. Many schemes take place on constrained live sites, surrounded by ageing infrastructure, clinical risk, operational pressure and limited decant capacity. They must maintain services while changing the buildings those services depend on. In that context, what appears on the surface to be poor execution is often the cumulative effect of early decisions that underestimated the conditions in which the project would be delivered.
Complexity and a moving clinical target
Healthcare capital projects operate within a level of complexity that cannot be designed away. They must integrate infrastructure, workforce models, digital systems and evolving clinical pathways, often across extended timelines. At the same time, healthcare itself does not stand still. Clinical practice evolves, new technologies emerge and demand patterns shift. What looked like the right model at the start of a programme may need to be reconsidered by the time the building is ready to open.
That creates a difficult tension for leaders. If a project does not adapt, it risks delivering a facility that is already behind the needs of patients and staff. But if it does adapt, those changes can bring cost, delay and disruption.
In that context, an overrun is not always a simple sign that something has gone wrong. Sometimes it is the visible result of projects attempting to remain clinically and operationally fit for purpose.
Governance needs to start earlier
Another reason capital projects overrun is that governance is too often focused on reporting progress rather than shaping the conditions for success. By the time a project enters formal reporting cycles, many of the most important decisions may already have been made. The site may have been selected, the funding route assumed, the procurement strategy started, the clinical model accepted and the completion date communicated. At that stage, governance can become a way of monitoring slippage rather than preventing it.
Good governance should do more than ask whether a project is on time and on budget. It should ask whether the project is ready to move to the next stage. Is the brief stable enough? Are the risks properly understood? Does the programme reflect the reality of a live healthcare environment? Are the right people involved in decisions? Do the benefits remain credible if the cost, scope or timeline changes?
This becomes harder when accountability is spread across multiple organisations. Capital projects often involve clients, contractors, design teams, clinicians, estates teams, commissioners, regulators and national bodies, each with different responsibilities and incentives. Procurement models are intended to manage risk, but they can also divide ownership in ways that make collective problem-solving more difficult.
When conditions change, that fragmentation matters. Interfaces between organisations can become points of friction. Decisions take longer because no single party can resolve the issue alone. Each organisation may be acting rationally within its own contractual or operational constraints, while the project as a whole loses alignment.
Continuity of organisational memory adds another layer of difficulty. Major schemes often take many years to plan and deliver, during which leadership teams, clinical priorities and system structures may all change. Leadership turnover can accelerate the loss of context, but it is not the underlying problem. Even where leadership remains relatively stable, organisations can gradually lose sight of the assumptions, trade-offs and intended benefits that shaped a programme at the outset.
Reflecting on this point, George Findlay observed:
I found myself wondering whether projects sometimes appear to drift because the organisations around them have drifted first
George’s observation shifts the discussion beyond project delivery and into a broader question about organisational continuity. In long-running programmes, the project is not the only thing that changes. The organisation around it changes too. Clinical models evolve, leadership teams move on, system structures alter and the external environment may look very different by the time a scheme is delivered. The critical issue is therefore not whether the same individuals remain involved throughout, but whether the organisation retains a clear understanding of why the programme exists and the rationale behind the decisions already taken.
This creates a different kind of governance risk. A programme may continue to progress through formal approvals and delivery milestones, while the organisation gradually loses connection with the assumptions that shaped it. New leaders inherit the cost, timeline and scope, but not always the full context behind the key decisions. Over time, programmes can become disconnected from the strategic intent that originally justified them.
This is why organisational memory matters. Boards and system leaders need to understand not only what has been decided, but why. What assumptions sat behind the original case? What benefits was the programme meant to deliver? Which risks were accepted, and on what basis? Which parts of the brief remain fixed, and which need to be revisited as the organisation changes?
Preserving that memory requires deliberate organisational routines, rather than relying on good intentions or individual recollection. Periodic strategic reviews are one example, but the broader requirement is for governance mechanisms that regularly reconnect a programme to its original purpose. These reviews should revisit the assumptions behind the business case, test whether the intended benefits remain relevant and examine whether changes in clinical, operational or workforce priorities require the programme to adapt.
This is an important governance role. Decision logs, clear benefit ownership, structured handovers between sponsors and regular reviews of the programme rationale can help retain context through organisational and leadership change. They also create a disciplined way to distinguish between unnecessary scope drift and legitimate adaptation to new evidence. For NHS boards and system leaders, the real test is not simply whether a project can pass a gateway. It is whether the project is being protected from avoidable failure before major commitments are made. That requires honesty about uncertainty at the point when it is still possible to do something about it.
A better question for healthcare leaders
“Why do capital projects nearly always overrun?” is an important question. But perhaps the better question is: why are so many projects set up in ways that make overrun more likely?
The answer is not to become slower, more bureaucratic or more risk averse; the NHS cannot afford that. The answer is to become more honest earlier. Early stages should be treated as a period of structured discovery, not simply as a route to approval. That means investing properly in the brief, testing the clinical model before locking the design, understanding the estate before fixing the cost and allowing contingency to reflect risk rather than aspiration.
It also means recognising that change is not always a failure of control. In healthcare, projects need to remain relevant in a system that is constantly moving. Clinical models evolve, technology changes, demand shifts and workforce pressures alter how services can realistically operate. Flexible building strategies, phased development and adaptable design can help schemes respond to these changes without disproportionate disruption.
Leaders also need mechanisms to reassess whether the assumptions underpinning a programme remain valid over time. Long-term capital projects should not only be measured against the conditions that existed when they were approved, but regularly tested against the realities they are ultimately being delivered into. This is not about reopening every decision. It is about ensuring that programmes remain strategically connected to the organisations they are intended to serve.
Success therefore needs to be measured more intelligently. Delivering a project on its original budget has limited value if the facility no longer meets clinical need by the time it opens. Equally, exceeding an early estimate may still represent better long-term value if it results in a building that remains safe, efficient and relevant for decades.
Capital projects do not overrun simply because they are poorly managed in delivery. They overrun because uncertainty is underestimated, decisions are fixed too early, accountability becomes fragmented and optimism is mistaken for control. For healthcare leaders, this presents both a challenge and an opportunity. The challenge is to recognise that many of the drivers of overruns are structural, not incidental. The opportunity is to rethink how projects are defined, governed and measured from the outset.
The projects most likely to succeed are not those that pretend risk does not exist. They are the ones that bring risk into the open early enough to manage it. They are also the ones that maintain enough organisational memory to understand which assumptions still hold, which need to change and why the programme mattered in the first place.
That may be the real lesson for healthcare capital investment. The question is no longer only why projects overrun. It is whether the system is prepared to stop setting them up in ways that make overruns so likely.
